Title DRC_BUY_TP 40,000_UPSIZE 25_Keep Rolling_BSC Company Update
Report Type Phân tích công ty
Source BSC
Industry Industrials
Bussiness DRC
Detail Date : 25/04/2022
Total pages : 11
Language : English
File Type : .PDF
FileSize : 1036 Kb
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Short Content

 VALUATION 

We recommend BUY for DRC shares  with a target price  of  VND 40,000 defined by the P/E valuation method with the 2022 target P/E = 12.5x to shine (1) Strong growth in profitability in 2022 comes from very large demand and attractive selling prices and (2) Long-term growth prospects with Radial 3 factory It will be fully operational from 2024.
 
FORECAST BUSINESS RESULTS
The BSC forecasts  drc wood business results  in 2022 as follows:
- In 2022:  Net revenue and profit after tax- noncontrolling interests reached VND 5,012 billion (+14.4% YoY) and  VND 377 billion (+29.5% YoY), EPS FW2022 = 3,172 VND/ SHARE, respectively, corresponding to P/E FW2022 = 10. 1x.
Key assumptions for DRC business results include (1) Good growth in DRC product consumption: Radial +18% YoY, Bias +5% YoY, (2) Average selling price of products slightly increased +3% YoY and (3) Gross margin increased by 40 bps, reaching 17.5%.
 
INVESTMENT OUTLOOK
Output continued to grow strongly thanks to (1) good market demand, (2) taking advantage of competition and (3)  improved adverse conditions.
Gross margin continues the upward trend, reaching 17.5% (+40 bps vs 2021)
 
RISK
The price of raw materials, especially rubber, rose more sharply than expected.
 
BUSINESS UPDATE
In 2021, DRC recorded net revenue and profit after tax reaching VND 4,380 billion (+20.1% YoY) and VND291 billion (+13.4% YoY) respectively  thanks to the growth of all types of products.